Last week, news broke that Jeff Bezos – founder and CEO of the tech behemoth Amazon – is well on his way to becoming the world’s very first trillionaire.
Now, we already knew Bezos is an exceptionally wealthy guy. His net worth stands at a whopping $149.4 billion, making him the richest man in the world by a wide margin.
But the word trillionaire is another thing entirely. Whether you like the guy or not, that’s a massive number – and a single individual harboring that kind of capital would be unprecedented.
Recently, Bezos has come under fire for his insane personal fortune. The fact he’s growing his wealth during an increasingly unstable economic crisis has many up in arms.
But I do think that this news presents an interesting case study for those of us in the startup world whose goal is to break down the walls that separate risk and reward opportunities from everyday investors like you.
And what better place to start than Amazon’s earliest days? Remember, in 1995, Amazon first launched as an online bookstore with a big vision – and it all happened in Bezos’ garage.
In its first couple of years, Amazon raised around $1 million from a handful of investors who each wrote Bezos a $50,000 check… give or take a couple of dollars. In return, each investor received a stake of less than 1% of the company, for a combined 20% equity.
These early-stage investments were supplemented by a very generous donation from Bezos’ parents… who chipped in a significant chunk of their savings – almost $300,000 – to get the company off the ground.
In its Series A financing round, Amazon raised $8 million from its only VC investment as a private company before officially going public in May 1997.
But the way I see it, Bezos missed a big opportunity… whether he realized it or not.
Let me explain. For investors who are already super-rich – like the ones who backed Amazon during its earliest days – a $50,000 check isn’t all that much.
But only a very exclusive percentage of the population has the ability to write those kinds of checks. And if opportunities like investing in the world’s next Amazon are reserved solely for society’s elite… that leaves out millions of everyday people who I believe deserve an equal shot at the same massive returns.
So, just for fun, let’s imagine a different scenario:
Imagine if instead of raising $50,000 from 20 or so accredited investors, Bezos had accepted $100, $50, or even $10 investments from thousands of people. In fact, if Bezos had accepted 100,000 investments of just $10, he would have raised the same $1 million during Amazon’s seed round.
And if we fast forward to 2026, when Bezos is projected to become the world’s first trillionaire… those 100,000 investments could have been worth around $1 million each.
In other words, an opportunity like that would have created a whole new generation of millionaires – and brought our society a little bit closer to a fairer distribution of wealth.
So instead of making thousands of people rich, Amazon’s seed round turned roughly 20 millionaires into billionaires… as usual, excluding the vast majority of the population.
That’s what really gets me. These hyper-exclusive, high-capital deals only serve to drive the wedge deeper between the wealthiest upper echelon and the rest of society.
My mission is – and has always been – to pull back the curtain on opportunities like these that were traditionally reserved for society’s wealthiest and most elite members.
I believe that everyone deserves a level playing field… because when founders let more than just the high and mighty share in their wealth, everyone benefits.
And as more and more companies choose to democratize their capital by utilizing financing methods like crowdfunding, it’ll be a revolution for everyday investors like you.
I’m so excited to have you all along for the ride as we make some serious history. Let’s keep breaking down those walls, together.
Until next time,
46 responses to “We’re Leveling the Playing Field… Here’s Why”
May 21 2020